Mesa Air shares take off after new UAL agreement
19/01/2024 15:26
** Shares of regional carrier Mesa Air MESA.O up 64% at
$1.05 early Fri after new agreement with United Airlines UAL.O
** MESA shares on course for record one-day pct gain
** Phoenix, Arizona-based co late Thurs said new agreements
with UAL will "significantly improve" operating income and
liquidity
** Agreements highlights include increased block-hour rate
in UAL capacity purchase agreement (CPA) projected to generate
approx $63.5 mln in incremental rev over the next 12 months, and
$12.6 mln extinguishment of outstanding UAL bridge loan and
revolving credit facility
** Also, MESA said since Sept 2023 it sold or entered into
agreements to sell excess CRJ-900 aircraft and related engines
for combined gross proceeds of $198 mln, to pay down $174 mln in
debt
** "While the situation remains challenging, this stability
is critical as we continue to restore our pilot capabilities,
drive increased fleet utilization, and step up block-hour
production" - MESA Chairman/CEO Jonathan Ornstein
** MESA last year switched to UAL from American Airlines
AAL.O and said it was exploring options to raise money amid
rising costs from fuel prices and new labor contracts
** Including move on the session, MESA's stock has halved
over the past year. Co went public in 2018 IPO priced at $12
(Lance Tupper is a Reuters market analyst. The views expressed
are his own)
((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))